Breaking down the Raptors’ 2019 off-season salary cap outlook

Toronto Raptors forward Kawhi Leonard speaks to the media. (Nathan Denette/CP)

This story has been updated to reflect Marc Gasol’s decision to opt into the final year of his contract.

The NBA’s free-agent moratorium period will open this Sunday at 6:00 p.m. ET, and while the Toronto Raptors have rightfully been enjoying their downtime, basking in that championship-winning glow, the off-season’s business now hangs over the club like an inching moon making its way to eclipse the sun.

As you’re probably already aware, this is a very important summer for the Raptors. One that could very well determine the course of the franchise for the next five years or more.

This, of course, will all come down to Kawhi Leonard’s free-agent decision. He has a player option for next season, but it’s expected that he will decline it. Rumours are swirling that his decision will come down to the Raptors and Los Angeles Clippers, and that he may even give the Philadelphia 76ers a look.

Leonard is the big domino to drop that will determine the Raptors’ course of action and will feature prominently in any decision Masai Ujiri, Bobby Webster and Co. make.

So then, to better understand just what exactly the Raptors have in front of them now with free agency just days away, here’s a closer examination of Toronto’s 2019-20 salary cap situation and how the club might tackle things in this key off-season and beyond.

NOTE: All salary cap figures are via Spotrac, while collective bargaining agreement details are sourced from Larry Coon’s CBA FAQ.

What will the NBA salary cap be next season?

Before looking at the Raptors, specifically, it’s important to know just what the cap and luxury tax threshold will be next season for the rest of the league as it will help us to better frame Toronto’s outlook.

2019-20 (estimated)
Salary Cap
Luxury Tax
Luxury Tax Apron

As this table shows, the cap is estimated to increase by about seven per cent from last season. The luxury tax and tax apron values will also be important to keep in mind as we go along here.

The 2019–20 Raptors salary cap picture

Here’s a summary of the Raptors’ cap outlook for next season:

Player Cap Figure
Kyle Lowry $34,996,296
Marc Gasol $25,595,700
Serge Ibaka $23,271,605
Norman Powell $10,116,576
Fred VanVleet $9,456,163
Pascal Siakam $2,351,839
OG Anunoby $2,281,800
Chris Boucher $1,588,231 (non-guaranteed)
Malcolm Miller $1,588,231 (non-guaranteed)
Justin Hamilton $1,000,000 (dead cap)
  Total: $112,246,441

Now that Gasol has opted into the the final year of his deal, Toronto has nine players under contract for 2019–20 (Justin Hamilton doesn’t take up a roster spot, but his “dead” money still counts against the cap) and is already approximately $19.75 million away from being a tax-paying team once again.

What the Raptors are looking at if “He Stay”

Here’s a peek at what the Raptors’ cap figure would look like for next season if the best-case scenario happens and Leonard decides to sign a max extension with Toronto:

Player Cap Figure
Kyle Lowry $34,996,296
Kawhi Leonard $32,700,000
Marc Gasol $25,595,700
Serge Ibaka $23,271,605
Norman Powell $10,116,576
Fred VanVleet $9,456,163
Pascal Siakam $2,351,839
OG Anunoby $2,281,800
Chris Boucher $1,588,231 (non-guaranteed)
Malcolm Miller $1,588,231 (non-guaranteed)
Justin Hamilton $1,000,000 (dead cap)
  Total: $144,946,441

Looking at the numbers in front of the Raptors should they manage to re-sign their Finals MVP for at least one more season, we see a much clearer picture of the resulting cap dilemma.

With Leonard, the Raptors would have 10 men under contract and find themselves about $8.3 million over the luxury tax threshold, meaning they’d already be in line for a tax bill of $13.3 million with at least four roster spots left to fill.

More pertinent to the topic of team-building, by being a tax-paying team the Raptors will also be under additional restrictions (more on this below).

Likely resources at the Raptors’ disposal this off-season

They won’t be able to use all of these, but here’s a general idea of what the Raptors can do in the off-season to try to improve themselves.

The word “exception” will be tossed around a lot here and that’s because the only way a team can sign a player or make a trade that would leave it above the salary cap, is to use one of the legal exceptions as outlined in the NBA’s CBA. It’s because of these exceptions that nearly every NBA team can and will operate above the league salary cap at all times, treating the luxury tax threshold as the real spending deterrent.

Non-tax-payer mid-level exception: There are different tiers of “mid-level exception” and this is the highest. Worth approximately $9.2 million in starting salary, this particular mid-level exception is also referred to as the “full mid-level exception” because in addition to being the most highly valued, it also allows teams to offer contracts in length of up to four years.

In order for a team to qualify for this exception, a team must be below the luxury-tax apron after making the deal. This rule holds true even if a team decides to split the mid-level exception between more than one player.

For the Raptors, this is a potential option only if Leonard decides to leave.

Tax-payer mid-level exception: This functions almost exactly like its big brother, but it comes with a much lower value of $5.7 million this year and teams are only allowed to offer contracts up to three years in length.

This is the more likely mid-level exception that the Raptors will have at their disposal as they’ll likely be a team above the apron. Like the non-tax-payer one, teams can split the value of it to sign multiple players.

When used, however, because a team will be over the apron, that club will be hard-capped to the apron’s value for the remainder of the season, meaning it can’t exceed the apron under any circumstance to make an additional move that year.

Traded Player Exceptions: As seen with the Leonard trade last July, a trade might be the very best way for the Raptors to improve themselves. One way they would be able to help facilitate a potential deal would be through a “traded player exception.”

A traded player exception, or just trade exception, is a mechanism that can allow teams over the cap to complete trades as the money from a trade exception can be used to help match salaries and make a deal work.

In Toronto’s case they hold four of them worth a total of $8.5 million. Unfortunately, you can’t just pool all of these individual trade exceptions’ worth into one transaction as you can use only one per trade.

The most valuable trade exception the Raptors have—created then they traded Jakob Poeltl in the Leonard-DeMar Derozan swap—is worth $2.9 million. If the Raptors are looking to use this, they have to work quickly as it’ll expire on July 18.

Trade a player(s)/draft pick(s): Perhaps the simplest option for a Raptors team trying to get better would be to make a trade. They have a lot of big-money players with just one year left on their deals (more on this later) who would make attractive targets looking to rent a player for the short term or dump long-term salary.

And if the Raptors are looking to be buyers, they’ll have all of their future first-round picks to sweeten a deal.

Free agents

Here’s a quick glance at who the Raptors’ free agents are this year:

• Kawhi Leonard (Player Option worth $21,329,750)
• Danny Green (UFA)
• Jeremy Lin (UFA)
• Jodie Meeks (UFA)
• Eric Moreland (UFA)
• Patrick McCaw (RFA with qualifying offer of $1,818,486)
• Jordan Loyd (RFA)

That’s eight possible free agents to worry about. Granted, some players aren’t of much concern (like Lin, Meeks, Moreland and Loyd), but this is still a good amount of business that will need to get done.

Green is of particular interest because of how large his role was for the Raptors last season. Determining his value to the team will be key as he’s likely in line for a raise over the $10 million he just made.

And, like everything else, the Raptors’ decision to bring him back will be heavily influenced by Leonard’s call. If Leonard doesn’t stick around, it might not make sense for Toronto to keep Green.

Potential Kawhi contracts

And this bring us to our next question: Just what would Leonard’s contract look like if he stays?

The five-year, $190-million deal has been mentioned a lot, mainly because it’s a lot more money and one more year of term that only the Raptors can offer Leonard as opposed to the four-year, $140-million max money and term he could get on the open market.

However, a short-term deal might make more financial sense for Leonard as he’ll want to reach free agency again in 2021 when he’ll have completed 10 seasons of service time and be in line for 35 per cent of the salary cap on a max deal instead of just the 30 per cent he can get now.

Therefore, if Leonard were to do a two-year contract with the Raptors he’d guarantee himself the most money in the near term and then be able to hit free agency at his ideal time while still in his prime as a 29-year-old.

Should he do this, using the $116-million salary cap projection for the 2020-21 season, Leonard could be in line for an outrageous five-year, $235.5-million contract with the Raptors (or whatever team owns his Bird rights at that time).

Pretty good incentive to stay in Toronto.

Looking beyond next season

To fully understand the Leonard situation proper and how it affects the Raptors’ future, it’s vital to understand the team’s outlook for the 2020-21 season.

For that year, the Raptors will have only two players under contract: Norman Powell and OG Anunoby.

This appears to have been by design by Ujiri to set the Raptors up based off what Leonard’s decision might be.

If Armageddon comes to pass and Leonard does decide one season in Toronto was enough for him, the Raptors will immediately have the option to go nuclear with the contracts of Kyle Lowry, Gasol, Serge Ibaka and Fred VanVleet all expiring.

Expensive as most of those contracts may be, all four players are valuable for basketball reasons and would be nice additions to any championship contender – something the Raptors would no longer be without Leonard.

It would mean a hard drop back to the bottom after finally reaching the mountaintop, but this is very much on the table for the Raptors with a Leonard departure.

With that said, looking optimistically, if Leonard wants to stay, those same players – or at least some of them – would probably be retained by the Raptors and this championship train would just keep on moving.

The Siakam situation

Lastly, while the Leonard situation is certainly the most pressing, the Raptors will also have to make a rather important decision on Most Improved Player finalist Pascal Siakam.

Now entering the fourth season of his rookie-scale contract, Siakam is eligible for something called the “designated rookie extension.”

This is a five-year extension that kicks in after a rookie-scale player’s fourth season and allows that player a maximum salary of 25 per cent of the cap, so long as his team offers it up.

In Siakam’s case, again using that $116-million projection for 2020-21, if the Raptors were to offer him this extension, he’d potentially see a contract worth $168.2 million over five years.

That’s great news if you’re Siakam as he just may have proven himself worthy of a max deal. But for the Raptors, making a call on designating him and inking him to such an expensive contract won’t be as easy to make as you think.

Once again, this comes back to the Leonard decision. If he decides to stay, you’d have to think extending Siakam would be a no-brainer, but depending on the length of Leonard’s contract, would committing to Siakam for that long be worth it?

Not to mention, the Raptors have enjoyed all this production from Siakam while he’s still super cheap. They’ve essentially been able to bring in expensive pieces because of how valuable his rookie deal ended up being.

Is it possible to build a deep enough team with contracts as expensive as Leonard’s and Siakam’s on the books?

And much the same can be asked should Leonard leave. Is Siakam really ready for the franchise-player role? He’d be paid like it at the very least.

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